Fri, 23 Mar 2012 10:16:00 +0400
In such a case, the loss of 19 largest banks would amount to 534 bln. dollars. Despite considerable drop of predicted capital, 15 out of 19 holding banking companies will keep their capital four times higher than its normative value.
According to Aleksei Afanasiev, the head of the Department of Portfolio Investments of Masterforex-V Academy, last week’s macroeconomic data was mostly positive:
1. Retail sales rose by 1.1% in February, taking into consideration seasonal fluctuations. In comparison to February 2011, sales have risen by 6.5%. January sales have risen from 0.4% to 0.6%.
2. Industrial production remained the same. Capacity ratio is falling. It has dropped by 78.7% or by 1.6 points from the average since 1972. Its value is 18.3% lower than before crisis. Capacity ratio in January has been lowered from 78.5% to 78.8%. Industrial output did not change in February. Market consensus was slightly worse than expected.
3. Reports of Philadelphia FRS about national production volume slow minor increase in January. Current activity index in March amounted to 12.5 and showed the increase by 2.3 basic points, which is the maximal point since April 2011. General business index remained almost the same in March and amounted to 20.2.
4. Weekly unemployment claims have dropped to 351 000. The four-week moving average is close to the lowest point since the beginning of 2008.
5. Consumer sentiment index dropped to 74.3 in March from 75.3 in February, which is lower than market consensus. Consumer’s general sentiment is rather weak and does not show certain signs of recovery. Small business index slightly rose in February. It has risen form 93.9 to 94.3, which is the 6th rise in a row. However, the index remains at a rather low point due to slow economic growth.
Rally, which started since the beginning of the year, is getting weaker and casts pressure on investors’ psychology. We are currently observing overbought market, and there remains the only question: “will the future correction amount to 3-5% or 10-15%, or something else?”. We recommend redistributing the portfolio, for we believe that aggressive buying at current points are inappropriate.
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The Chinese economy seems to have exhausted its growth potential the way it is now. With that being said, Beijing now has to fight the existing lending bubble as well as the country’s dependence on investments.
Iran is finally free of Western sanctions. The sanctions imposed by the USA and its Western allies regarding the Iranian nuclear program no longer exist, which gives Iran an opportunity to return to the global market of crude oil as a major player.
This year, the global economy is going to be seriously affected by the economic slowdown in China, which is the world’s second-largest economy after the USA. This is what the IMF’s chief economist thinks on the matter. During his interview to IMF Survey, he said that the global economy is going to be seriously influenced by emerging markets, including China as the major one.
Some experts believe that the economic slowdown in China may indirectly affect the political and economic situation in Russia. While, the international community is watching the escalation of the conflict between Saudi Arabia and Iran, Russia is one of those who may benefit from the conflict in the Middle East.
The Fed’s interest rate hike has put an end to the era of super-cheap money in the USA. For other countries including Russia, this means tougher competition for foreign loans and investments. A lot has been said about the Fed’s money printing within the scope of QE as well as about low interest rates. The Federal Reserve ended QE more than 12 months ago. However, the decision to start raising the interest rates was a truly major event for the international community. The decision to raise the interest rate for the first time in 9 years was made on December 16, 2015.
The USSR once had an ambitious goal to outpace the USA in every single aspect. Today’s Russia doesn’t even try to speak about it. Russian politicians are only touching upon some historical and geopolitical missions as well as human spirituality. Apparently, Russia want’s to be a superpower in the modern world.
It is reported that the Fed’s FOMC members are still at odds over the idea of increasing the interest rates as promised. We remind you that the FOMC meeting is going to take place just in a few days (less than a week).